Cambridge Cognition losses widen amid sales slump

Cambridge Cognition generated lower-than-expected sales from its core business in the first half due to short-term market factors - including a merger of two large customers leading to delays in finalising contracts, reduction in safety testing of two drug classes and a dip in trial initiations for Alzheimer's drugs.

The AIM-listed group said full-year revenues looked set to drop from £6.13m to £5.04m, while its pre-tax loss was expected to have widened to £2.90m from £1.44m.

However, despite the soft third quarter, Cambridge Cognition said that the fourth quarter and early 2020 had seen "a return to significant growth".

Cambridge Cognition added that the detailed measures taken to overcome the mid-year market challenges were paying off, with £4.1m of orders already booked for delivery and recognition in 2020.

In a separate announcement, Cambridge Cognition said it was looking to raise up gross proceeds of £1.4m through the issue of seven million new ordinary shares.

Cambridge added that the net proceeds of the fundraising would provide it with sufficient capital to drive "significant growth" and stated that its board expects the company to be profitable by the fourth quarter of 2020.

As of 1340 GMT, Cambridge Cognition shares had sunk 22.50% to 23.25p.